Thursday, October 26, 2017

Pentagon takes over cost savings program from Lockheed...Death spiral obviously on the horizon.

via Defense News.

The U.S. Defense Department’s deep dive into the F-35’s cost is officially underway, as a team of Pentagon officials works their way through the massive supply chain of the joint strike fighter, a top official said Monday.

The Pentagon knows how much it’s paying for the F-35, but the deep dive will help officials understand the true cost of the jet and why, as well as what can be done to whittle down the price tag even further, said Shay Assad, the department’s director of defense pricing.

Over the next several weeks, the assessment team will meet with the three major contractors on the F-35 — prime contractor Lockheed Martin, as well as BAE Systems and Northrop Grumman, which make major portions of the fuselage — and lay out the parameters of the review.

“Lockheed is familiar with this process because we’ve done it before with them, so this isn’t something new,” Assad said. “Many of the things we’re talking about are just practices that have occurred in the past, this will just be much more rigorous. So we’ll lay it out with the companies. And we’ll also lay out for them: Here’s our plan in terms of your subcontractor base, and this is what we want to do, and then get off and get the work done.”

But wait! The F-35 is already on course to be less expensive than the Super Hornet according to the fan boys over at F-16.net so why do this?

Because its obvious that the death spiral is on the horizon. We can probably add to it that Block 4 isn't going to deliver as promised either. Already we're hearing about weapon systems being moved to Block 5.

Forget all the "so called deployments". The reality is stark. The F-35 IS NOT delivering as promised and Lockheed Martin and the Pentagon know it.

My advice? Watch their stock carefully. Expect some well placed executives to start selling stocks and retiring early. The F-35 has turned into a dropped knife...the only question that remains is who will be forced to catch it.